It appears as if the government is fully intent on continuing the planned privatisation of a number of public sector enterprises (PSEs) like former governments. Community-enhancing activities pursued by non-governmental organisations and the private sector are now fully recognised in Pakistan even in the areas traditionally seen as under the superintendence of the government. Poverty reduction, through various microfinance programmes (many of which are either not-for-profit organisations or private sector institutions), is a well-documented phenomenon. Improvement in the standard of living through private residential schemes is also fast replacing the traditional role of local bodies. Examples include mega residential dwellings like the Defence Housing Authorities (DHAs) in Karachi, Lahore and Islamabad, Bahria Towns in large cities and the yet to be fully developed Gulberg Greens in Islamabad. Such projects certainly improve the standard of living of those who live therein but those living outside such planned dwellings are unlikely to realise the benefits. Private sector housing schemes are an excellent example of ‘privatisation’ of the city and town planning, an area that is typically the strict prerogative of local governments in most developed countries. In Pakistan, this function has never been performed with any degree of efficiency or efficacy by local governments in most cities. A notable exception has been the Capital Development Authority (CDA), but even this has deteriorated in its effectiveness. While a number of successful private sector residential projects are sprouting in and around Islamabad, the CDA has failed to protect its traditional turf from encroachment by slums that have, over the years, appeared in the capital. This has resulted in the rise of petty crime, impacting security and law and order. These dwellings present an ugly picture of urban life in the capital where the CDA otherwise spends huge sums to beautify the city. It is almost certain that any attempt by the CDA to remove these slums will fail, as has been the case in the past. Can then the private sector be used as a solution to this problem? A framework for a market-based approach already exists in the form of the Saidpur village development. Saidpur, a small village embedded in the capital, was no more than a slum before it was transformed into a culturally rich hotspot for food lovers. More than that, the main street is the home of a number of other outlets for handicrafts and related arts. This has certainly helped local residents, many of whom are now employed by local businesses. Because of an increase in property prices, a number of families have moved out by selling their houses to commercial businesses. A similar model can be adopted for improving other sites where illegal occupation has resulted in unplanned developments and slums. Some of these slums have now been officially recognised by the CDA, giving certain rights to the illegal occupants. One such example is the Christian colony around a rain stream in the G-7/2 sector. More than three decades ago, a Christian community began to form on the banks of a rain stream on Shah Abdul Latif Road; today, it has become a major headache for the CDA, which has time and again failed to remove this slum. Their failure to act has encouraged the Christian community to start another slum next to the Sitara Market at G-7 Markaz. This clearly indicates the failure of a government institution — the CDA — in performing its basic duty of urban planning. In fact, the institution, once seen as the most prestigious civic body in the country, is highly unionised, headed by a number of chairmen since the departure of Kamran Lashari, and has consequently become ineffective even in performing its basic functions. There are about 20 slums in Islamabad inhabited by different communities, including Pathans, Christians and some other groups. If the CDA cannot remove these slums, private parties and NGOs should be allowed to move in and develop these areas into model villages with different themes. For example, the Christian slum along Shah Abdul Latif Road (in G-7/2) could be developed into a multi-faith community by bringing different faith groups together. Next to the slum is a community centre, which could be used as a centre of excellence for dialogue between different faith groups. As people have lost their faith in the CDA, private sector organisations can play a role in bringing up the standard of living in these slums. There are about 75 embassies and high commissions in Islamabad. It should be easy for an organisation to raise $ 100 million (about Rs 10.5 billion) from these foreign diplomatic missions, which could be used to develop sustainable social and economic infrastructure to improve the quality of life of the inhabitants of these slums. If a private sector organisation or NGO takes up the matter and brings relief to these deprived communities, it will certainly be a big slap on the face of the CDA and its failing management. The writer is a PhD in Economics from Cambridge University and can be contacted at humayon@humayondar.com